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"It provides them with little investment return without taking some investment risk," he said, saying even blue-chip government bonds made around zero return.

"Real interest rates - that is rates after taking into account inflation - are negative in many countries. In New Zealand, yields on 10-year government bonds are somewhat higher at 3.2 per cent. However, after taking off tax and allowing for inflation, the real yield on NZ government bonds is close to zero," Mr Windust said.

ASB economist Jane Turner pointed to low interest rates as a big driver for rising housing activity. The housing market continued to recover and the recent drop in fixed-term mortgage rates below floating rates was likely to provide further support to housing demand in the coming months, she predicted.

Severe under-building was one of the reasons for rising house prices, she said, and until Auckland and Canterbury saw a meaningful increase in construction, pressures would continue to push house prices upward.

"Strong sales prices are starting to attract new listings on the market, which also increased strongly in May," she said of the Barfoot figures.

"Nonetheless, the overall level of new listings remains low and not sufficient to meet demand. Tight supply conditions will continue to place upward pressure on house prices."

Mr Thompson also cited severe under-building.

The low number of new homes built in past years, coupled with Auckland's population growth, had created a situation where supply remained the issue, and this was reflected in the prices being obtained, he said.

People should consider splitting their investments between property, the bank and investment vehicles like the NZX, he said. But plunging Facebook shares showed how sharemarkets often carried higher risks.